There Are Alternatives: Insuring to Bridge the Gap or Opting Out

One way for Medicare Part D enrollees to deal with the “doughnut hole” is to insure themselves against it. Another way is to simply not get involved with Part D in the first place.

STEPHANIE SAUL

One way for Medicare Part D enrollees to deal with the “doughnut hole” is to insure themselves against it. Another way is to simply not get involved with Part D in the first place.

Nearly one-third of Medicare prescription drug insurance plans now offer to pay for drugs through the doughnut-hole coverage gap that Congress designed into the program. That is up from only 15 percent of plans that offered gap coverage in 2006, according to the Kaiser Family Foundation.

But the doughnut-hole gap insurance typically covers only generic drugs. That complicates the calculus for patients trying to determine whether to pay the higher premiums for such policies, which typically cost about twice as much as the $28 average premium for plans without gap protection.

For those able to rely solely on generic drugs, the cheapest approach in the short run might be to forgo Part D insurance altogether. Instead, they could simply shop at discount retailers like Wal-Mart, Costco and Target whose pharmacies offer low-cost generics for as little as $4 for a monthly prescription.

To determine what their coverage cost will be under Medicare, and help choose the approach that is best for them, consumers can visit Medicare’s Web site. There, beneficiaries can enter their specific drugs, as well as the pharmacy they want to use, to see their options. The software calculates the best plan for a particular beneficiary among the 50 or so that are typically available in each state. This year’s enrollment period continues through Dec. 31.

The cheapest plan is not necessarily the best. Among things to consider are whether the plan carries a deductible; what it charges for co-payments on individual drugs; whether it covers drugs in the doughnut hole, and whether there are restrictions on some drugs.

Some plans, for example, limit the quantities of drugs a patient may get each month. Others require prior authorization for some drugs — meaning that the doctor has to make a special call to the insurer.

Some plans have recently added extra levels of co-pays or moved drugs from one co-pay tier to another, meaning beneficiaries pay more than they expected when they pick up their drugs.

The Medicare Web site is relatively easy to use, but some people may still need help.

“Many seniors don’t use the Internet and don’t use computers,” said Elisabeth Clayton, a client services associate for the Medicare Rights Center, a nonprofit group based in New York that offers help to Medicare beneficiaries nationwide.

By phone, Ms. Clayton recently assisted a Medicare beneficiary from Oklahoma who was searching for a plan. The woman takes 10 drugs, including 7 generics.

By entering the woman’s list of drugs and her pharmacy in the Medicare Web site, Ms. Clayton determined that the best option for her would be an AARP plan with a relatively high premium — $64.10 a month — but no deductible. The plan also offered gap coverage and few restrictions.

The second-best plan, offered by First Health, had a far lower premium: $16.40 a month. But it would have ended up costing $250 more by the end of the year — and a full $1,100 more compared with the mail-order option on the AARP plan, according to the Medicare Web site.

Similar assistance is available through a program called Area Agencies on Aging in many states. In Hot Springs, Ark., for example, the West Central Arkansas Area Agency on Aging has been offering appointments to assist Medicare beneficiaries in selecting a plan, according to Dody Roberts, director of case management.

“All plans are not going to cover all prescriptions,” Ms. Roberts said.

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